You have the choice of receiving $80,000 now or $30,000 now and another $56,000 two years from now. In terms of today's dollar, which choice is better and by how much? Money is worth 5.3% compounded annually Which choice is better? OA. The choice of $80,000 now is better OB. They are equal in value OC. The choice of $30,000 now and $56,000 in two years is better The better choice is greater than the alterative choice by $in terms of today's dollar. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

You have the choice of receiving $80,000 now or $30,000 now and another $56,000 two years from now. In terms of today's dollar, which choice is better and by how much? Money is worth 5.3% compounded annually Which choice is better? OA. The choice of $80,000 now is better OB. They are equal in value OC. The choice of $30,000 now and $56,000 in two years is better The better choice is greater than the alterative choice by $in terms of today's dollar. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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You have the choice of receiving $120,000 now, or $56,000 now and another $84,000 four years from now. In terms of today's dollar, which choice is better and by how much? Money is worth 6.6% compounded annually. Which choice is better? OA. The choice of $120,000 now is better. OB. They are equal in value. OC. The choice of $56,000 now and $84,000 in four years is better. C... The better choice is greater than the alternative choice by $ in terms of today's dollar. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
K You have the choice of receiving $100,000 now or $43,000 now and another $70,000 three years from now. In terms of today's dollar, which choice is better and by how much? Money is worth 6.5% compounded annually Which choice is better? A. They are equal in value. B. The choice of $43,000 now and $70,000 in three years is better. OC. The choice of $100,000 now is better. The better choice is greater than the alternative choice by $ in terms of today's dollar (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) 0 n
You have the choice of receiving S90,000 now, or $47,000 now and another $63,000 six years from now. In terms of today's dollar, which choice is better and by how much? Money is worth 6.9% compounded annually. Which choice is better? O A. The choice of $90,000 now is better. O B. The choice of $47,000 now and $63,000 in six years is better. O C. They are equal in value. The better choice is greater than the alternative choice by S in terms of today's dollar. (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Use future or present value techniques to solve the following problems. Starting with $13,000, how much will you have in 12 years if you can earn 15 percent on your money? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If you can earn only 12 percent? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If you inherited $20,000 today and invested all of it in a security that paid a 10 percent rate of return, how much would you have in 20 years? Round the answer to the nearest cent. Round FV-factor to three decimal places. Calculate your answer based on the FV-factor. $ Calculate your answer based on the financial calculator. $ If the average new home costs $240,000 today, how…
You have the choice of recelving $50,000 now or $20 000 now and another $35,000 three years from now In terms af today's dolar, which choice is better and by how much? Money is worth 6.6% compounded annually Which choice is better? O A They are equal in value O B. The choic. $20,000 now and $35,000 in three years is better OC The choice of $50,000 now is better
You have the opportunity to make an investment that costs $1.000,000. If you make this investment now, you will receive $250,000 one year from today, $200,000, $150,000 and $ 400,000 two and three years from today, respectively. The appropriate discount rate for this investment is 11 percent Should you make the investment? What is the net present value (NPV) of this opportunity?
Whichoption is better: receive $160,000 now or $50,000, $25,000, $55,000, $30,000, and $40,000,respectively, over the next five years? The cash flows are at the end of each year except for$160,000.Requirements1. Assuming a 6% interest rate, which investment opportunity would you choose?2. If you could earn 10%, would your choice change?3. Assuming a 10% interest rate, what would the cash flow in year 5 have to be in order foryou to be indifferent to the two plans?
You have the opportunity to make an investment that costs $1.000,000. If you make this investment now, you will receive $250,000 one year from today, $200,000, $150,000 and 400,000 two and three years from today, respectively. The appropriate discount rate for this investment is 11 percent. .a. Should you make the investment?
2 a) Suppose you receive $10,000 and have an opportunity to earn a real rate of return of 10% (assume known and constant forever). Using the definition of income proposed by John Hicks, what is your annual sustainable income? In other words, what amount can you spend every year forever? b) What is the present value of an annual payment of $10,000 forever, assuming a 5% real discount rate? $9,523.80 $200,000 Infinite $10,000
Suppose you invest $3,000 today and receive $10,000 in 25 years. a. What is the internal rate of return (IRR) of this opportunity? b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? a. What is the internal rate of return (IRR) of this opportunity? The IRR of this opportunity is%. (Round to two decimal places.) b. Suppose another investment opportunity also requires $3,000 upfront, but pays an equal amount at the end of each year for the next 25 years. If this investment has the same IRR as the first one, what is the amount you will receive each year? The periodic payment that gives the same IRR is $ (Round to the nearest cent.)
What is the relationship between present value and future value? • Suppose you need $15,000 in 3 years. If you can earn 6% annually, how much do you need to invest today? • If you could invest the money at 8%, would you have to invest more or less than at 6%? How much?
You have the option to receive $5,000 one year from now or $4,500 today. If the discount rate is 10%, which option should you choose to maximize your present value? Receive $5,000 one year from now Receive $4,500 today

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